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Paper 10 - 30 January 2004 Meeting

ASSOCIATION OF HAMPSHIRE AND ISLE OF WIGHT LOCAL AUTHORITIES

30 January 2004

SUBSCRIPTIONS AND BUDGET FOR THE ASSOCIATION 2004/2005

Joint report by the Honorary Treasurer and the Director

______________________________________________________________________

RECOMMENDATIONS

(1) That the application of the VAT refund of £12,000 to the capacity building fund be approved;

(2) That the budget for 2004/2005 be approved; and

(3) That the Associationís membership subscription unit be set at £2000 for the year ahead.

______________________________________________________________________

BACKGROUND

1. The Associationís year is from 1 June to 31 May. This enables Member Local Authorities to appoint their representatives after the elections. However, Member Authorities need to set their budgets now, so it is the Associationís policy to set its budget for next year, and agree subscriptions in January.

2. Member Authorities pay in accordance with their voting rights. Hampshire County Council has four votes and so pays four units of subscription. Unitary Authorities pay three. Police and Fire Authorities and District Councils pay two units. The Associations of Parish and Town Councils (APTCs) pay £1 per parish a year. The current subscriptions and income are shown in the table below:-

Subscriptions for 2003/2004

No of
Units of
Subscription
(£1,950)

Individual
Subscription
£

Total
Subscriptions
£

Hampshire County Council

4

7,800

7,800

Unitary Authorities

3

5,850

17,550

District Councils

2

3,900

42,900

Fire and Rescue Authority

2

3,900

3,900

APTCs

(£1.00 per parish)

240

Total subscriptions income

£72,390

FINANCIAL POSITION OF THE ASSOCIATION 2003/2004

3. The Honorary Auditor (Isle of Wight Treasurer) has signed off last yearís accounts. The Association started the current year with an operating balance of £36,752. This was higher than planned as a result of income received from training and member/staff development events and a refund of Value Added Tax (VAT) overpaid in earlier years. The Association moved quickly to set up "capacity building" i.e. training and development events in preparation for CPA (see elsewhere on the agenda) and development of community plans/local strategic partnerships. The VAT refund of just over £12,000 was applied to the capacity building programme.

4. We have successfully applied for a Government grant towards capacity building worth around £50,000.

PROJECTIONS FOR 2004/2005

5. Projections for next year show a continuation of the process of reducing accumulated reserves, but it would be prudent to increase subscriptions in line with inflation.

CAPACITY BUILDING AND VAT

6. As a result of a decision by HM Customs and Excise some two years ago, the Association is no longer VAT registered. As a result we received a VAT rebate which has been included in "other income" for the current financial year. As a result of deregistration we cannot reclaim VAT paid as part of the capacity building programme. Essentially it is uneconomic for the Association itself to organise conferences and courses. A priority at present is to come to an arrangement with one of our Member Authorities - or possibly South East Employers - to lead on training and staff/member development and hold the budget. The lead authority would take receipt of any Government grant on behalf of the Association and would disperse funds, reclaiming VAT in the usual way. Havant Borough Council is considering this at present.

SUBSCRIPTIONS FOR 2004/2005

7. It is proposed that the subscription rate be increased by 2Ĺ%. Proposed subscriptions are set out on the next page. Members may wish to note that the Police Authority is eligible for membership at the same rate of subscription as a District Council.

Subscriptions for 2004/2005

No of
Units of
Subscription
(£2000)

Individual
Subscription
£

Total
Subscriptions
£

Hampshire County Council

4

8000

8000

Unitary Authorities

3

6000

18000

District Councils

2

4000

44000

Fire and Rescue Authority

2

4000

4000

APTCs

(£1.00 per parish)

240

Total subscriptions income

£74,240

NICK TUSTIAN
Honorary Treasurer
 

NICK GOULDER
Director

Date: 14 January 2004
Annex: 1 (available on request)
Contact: Nick Goulder - 023 8068 8431, E-mail hiow@eastleigh.gov.uk

Last update: 19/01/2004
Author: Nick Goulder, Director

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